Anyone who hasn’t watched the first segment on 60 minutes last night, at least watch and listen to this 2 minute piece:

https://youtu.be/u4juqiRgClI?si=oYjiz585-LTruqSL

China is viewed as a huge problem. The government systemically seeks to steal IP and has done so for decades. 

Now, consider what was stated recently as throttling the acceptance of POET OEs as a viable replacement of the “guts” of transceivers. It was said that companies see too many of the integral parts of a transceiver replaced by a single POET chip, thus eroding their profit margins. But does this really make sense? If you can produce a transceiver at lower cost, in volume, with less components and manpower, how does this erode your profits? 

So, whats the real problem? China produces 85% of transceivers worldwide. More importantly, I’m guessing that 95% of the components of those transceivers are produced by Chinese manufacturers or under their control. So effectively, POET, a Canadian company, eliminates a huge portion of the Chinese supply chain. Think the Chinese government, who ultimately runs the manufacturing segment, is on board with that? 

SPX, as a JV, might mitigate a small piece of that loss, but again, what does China want? A: as much of the pie as they can have. Bright red flag. 

That comment in the 60 minutes about JVs sends chills down my spine. 

The POET Optical Interposer technology is now roughly 5 years old, even if China somehow cannot reverse engineer it, which I doubt is true, they have known enough about the concept to be developing their own knock off and time is not in our favor.

Solution: Get that other than China JV up and running ASAP, lock in the most specialized products that represent the other 15% of transceivers produced outside of China, and figure out a way to be economically competitive with a solution outside of China. In the datacom sphere, this is vital for POET.